SRC-SLL, JBJ S.B. 890 76(R)   BILL ANALYSIS


Senate Research Center   S.B. 890
76R6814 AJA-FBy: Harris
Economic Development
4/5/1999
As Filed


DIGEST 

Currently, health maintenance organizations (HMOs) are regulated by the
Texas Department of Insurance (department).  Often, in order to provide
medical care to their members, HMOs delegate various duties.  These duties,
which are usually delegated to independent physician groups, can include
sharing or delegating management services, contracting, utilization review,
and billing and claims payment services.  Neither Texas statutes or
department rules contain guidelines relating to the delegation of duties
between HMOs and these delegated networks.  S.B. 890 sets forth
requirements for the delegation of duties by an HMO to ensure that the
physician network is capable of delivering the delegated services. 

PURPOSE

As proposed, S.B. 890 authorizes a health maintenance organization to
delegate some of the organization's  functions. 

RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Chapter 20A, Insurance Code, by adding Section 18B, as
follows: 

Sec. 18B.  DELEGATION OF CERTAIN FUNCTIONS.  Defines "delegation agreement"
and delegated network." Authorizes a health maintenance organization (HMO)
to enter into a delegation agreement with a delegated network by executing
a written agreement that contains certain criteria, within a certain time
period.  Provides that this section does not affect Article 4495, V.T.C.S.
(Medical Practice Act), regarding the requirement that medical peer review
be confidential and privileged, notwithstanding Subsection (b)(9)(D).
Requires an HMO to provide data to each delegated network with which it has
a delegated agreement, and to provide the data contains certain information
regarding demographic statistics, risk, complaints, and other HMO
information in a specific electronic format, monthly.  Requires an HMO to
notify the network and take other specify action if finding through the
monitoring plan that the operation of the network creates a hazard for an
enrollee.  Requires the network to respond in writing to the HMO finding
within a specific period of time.  Requires the HMO to work with the
network to correct any non-compliance by the network.  Requires the HMO to
notify the Texas Department of Insurance (department) if the network does
not respond or an agreement cannot be reached between the HMO and the
network.  Authorizes the department to take certain action regarding a
request received by the HMO.  Provides that documents received under
Subsection (i) are confidential.  Requires the department to report the
results of the Subsection (i) review to a delegated network within a
certain period of time. Provides that this report is confidential.
Requires a delegated network to respond to the report and to submit a
correction plan within a certain period of time.  Provides that the
response and corrective plan are confidential.  Authorizes the department
to request the delegated network to take corrective action.  Authorizes the
department to take certain corrective action against a network, if the
network fails to comply with the department's request.   

 SECTION 2.Effective date: September 1, 1999.
  Makes application of this Act prospective.

SECTION 3.  Emergency clause.